Levels to watch: FTSE, DAX and S&P 500

The bulls are in charge once more, even with NFPs looming on the calendar for the day.

Traders walking past data boards
Source: Bloomberg

FTSE 100 continues to gain

Yesterday’s strong FTSE rally, based on Mark Carney’s new stimulus package, has continued modestly this morning, with the index pushing back to 6780 and the peak from 27 July. A break above here would suggest further gains in the direction of 6850.

Weakness on the final day of the week would indicate a move back in the direction of the lows of the week near 6600, but it looks like the upward move could continue for the time being, helped along by sterling weakness.

FTSE 100 price chart

DAX looks bullish

The index is clocking up more gains, after bouncing firmly off the 200-day simple moving average (SMA) – 10,076 – on Wednesday. However, it really needs to clear 10,400 to indicate that bullish momentum is really in evidence. This area caused gains to stall in late May, June and then at the beginning of this month, plus we have yet to see the index break its post-April 2015 downtrend.

‘Selling the rallies’ is still (just) the approach for European markets, unlike the UK and US where ‘buy the dip’ appears to have taken over again. 

DAX price chart

S&P 500 looks set to continue its upward move

A third day of gains is in the offing on the S&P 500, unless non-farm payrolls radically change the outlook. Having bounced from 2150, it looks like we could see another test of the 2180 area.

A break above here puts us back in ‘all-time high’ territory. A close below 2150 in coming days might raise the prospect of a move to 2120 and the 50-day SMA. 

S&P 500 price chart

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